Wedbush Securities has maintained its 'outperform' rating for Tesla Inc (NASDAQ:TSLA) with a price target of $175, despite the company's fourth-quarter deliveries falling short of expectations.
In the quarter, Tesla delivered 405,000 vehicles, missing the forecast of 418,000, consisting of 388,000 Model 3/Y and 17,000 Model X/S.
Production for the quarter was 440,000. While Tesla's 40% annual growth in 2022 is strong in a difficult macroeconomic environment, it failed to reach its target of 50% annual growth.
Wedbush noted that the demand and delivery outlook for 2023 is a cause for concern, suggesting that deliveries could be in the 35%-40% range.
Demand for Tesla's vehicles is reportedly starting to decline, and the company may need to cut prices, particularly in China, to maintain growth, the Los Angeles-based investment bank observed.
CEO Elon Musk will need to navigate the company through a difficult macroeconomic environment, rather than focusing on his personal social media activity, according to the Wedbush analysts.
Despite the disappointing delivery numbers, the analysts believe that a lot of negative news is already reflected in Tesla's stock price and the numbers "could have been worse."
They noted that the "Cinderella ride is over" for Tesla, and Musk will need to steer the company through a difficult macroeconomic environment.
Tesla's market cap is currently $385bn at Friday's closing stock price of $123.18.